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CNBC Transcript: Mike Pompeo, U.S. Secretary of State

Below is the transcript of a CNBC Exclusive interview with Mike Pompeo, U.S. Secretary of State. The interview was first broadcast on CNBC's Squawk Box Asia on 13 May 2019.

All references must be sourced to a "CNBC Interview'.

Interviewed by CNBC's Hadley Gamble

HADLEY GAMBLE: Mr. Secretary thank you so much for joining CNBC.

SECRETARY OF STATE MIKE POMPEO: It's great to be with you.

HADLEY GAMBLE: I want to kick off by asking you specifically about what we've seen in the last couple of weeks. We've seen a ratcheting up of the rhetoric when it comes to Iran. We've also seen of course more pressure coming from the Trump administration in the form of sanctions on individuals, on commodities, on oil and of course lots of questions about whether or not what we've seen in terms of the movement of the USS Abraham Lincoln toward the Gulf, and the possible deployment of a Patriot system to the Gulf as well, is really signaling that we're going to have imminent conflict. How do you respond to that?

SECRETARY OF STATE MIKE POMPEO: President Trump's been clear since the beginning of his administration, and then a year ago, and just a bit over a year ago now we withdrew from the nuclear deal, was a terrible deal. All kinds of bad things happened during the deal. Increased terrorism, more missile launches, and a radical increase in malign behavior from Iranian supported entities that ranged from the Houthis to the Hezbollah. All of that occurred while we were in the JCPOA. And President Trump is determined to change that behavior from Islamic Republic of Iran. We've laid down in May of last year the 12 simple things we're asking Iran to do. And the pressure that you see, the economic pressure we have applied, the sanctions that we've put in place, the efforts we've made to help Iraq stand up its own independent sovereign government, the support we provide to Lebanon, are all aimed at the same thing. Iran is the major destabilising influence in the Middle East and we aim to fix that.

HADLEY GAMBLE: And walk me through what led you in recent weeks to this uptick in terms of the military pressure that you're placing in the Persian Gulf.

SECRETARY OF STATE MIKE POMPEO: What we've seen from the Iranians is increased threats and we've seen this reporting it's real. It appears to be something that is current, that is things we're worried about today. So we've done all the right things to increase our security posture to the best of our ability. But we also want to make sure that we had deterrent forces in place. So in the event that Iran decided to come after an American interest - whether that be in Iraq or Afghanistan or Yemen or any place in the Middle East - we are prepared to respond in an appropriate way.

HADLEY GAMBLE: There's a whole lot of military hardware that's going into the Persian Gulf right now. It's a place that I've lived over the last 10 years. I mean in terms of this uptick there are a lot of fears whether they be in the military itself or externally in the region about potential for miscalculations there. How worried are you?

SECRETARY OF STATE MIKE POMPEO: We're not going to miscalculate. Our aim is not war. Our aim is a change in the behavior of the Iranian leadership. We hope the Iranian people will get what they finally want what they so richly deserve. The forces that we're putting in place the forces we've had in the region before, you know we often have carriers in the Persian Gulf. But the president wanted to make sure that in the event that something took place we were prepared to respond to an appropriate way. And as the secretary of state I want to make sure that we had all the political diplomatic tools in the right place and we want to make sure that we can provide the president with an option set in there in the event that the Iranians make a bad decision.

HADLEY GAMBLE: And I want to ask you about something in terms of what happened over the last week or so. You made a surprise trip to Baghdad and amongst all of the press reports that we saw in the last several days there was a great deal of surprise I think on the part of our European allies potentially even the German chancellor herself as regarding the fact that you missed a meeting that was a long standing meeting to set the record straight there kind of clear the air.

SECRETARY OF STATE MIKE POMPEO: Yeah. Look I regret that I wasn't able to meet with Chancellor Merkel and my counterpart Heiko Maas. We scheduled that already it's back on the calendar. I'm comfortable do this in the next couple of weeks. We've not announce the exact date but I think we've got it now set that on a date that works for both she and I. I very much want to have that conversation.

HADLEY GAMBLE: Surprised by that backlash that you saw in the press?

SECRETARY OF STATE MIKE POMPEO: Only in this. Our European partners are important allies on this issue with respect to the Islamic Republic of Iran. But there's assassination campaigns taking place in their countries. They, even the Germans, have arrested Quds force officials inside of their country. And they've seen too. We've seen European businesses respond. They understand American sanctions. They have almost entirely withdrawn their business operations from the Islamic Republic of Iran in spite of their government's efforts to keep some of them in there. This is the pressure that we hope to convince the leadership in Iran that there is another path, that there's a straightforward way forward for them. And we're happy, as President Trump says, we're happy to sit down and have a conversation with him, begin to have talks about ensuring they have no pathway to a nuclear weapon, something that was given to them under the JCPOA, that their missile program comply with 2231 - that's a U.N. Security Council resolution - and that this adventurism, this revolutionary effort to control capitals in Damascus and in Beirut and in Sanaa, that's not appropriate activity, it's destabilising. And we're asking them to conform to the normal thing that normal nations do. Nothing more.

HADLEY GAMBLE: You mentioned the difference between European businesses German businesses for example versus the actions of some of these European governments. Walk me through what you see as the relationship with the United States in that post Merkel world.

SECRETARY OF STATE MIKE POMPEO: So when I talk to the Europeans they get the threat from Islamic Republic of Iran. On the nuclear file they entered into agreement and they've taken a different path. President Trump made the right decision to withdraw, was the right decision for America. They made the sovereign choices for their nation. But when we talk about threats of terror, we talk about threats of destabilization, and we understand the risk from Hezbollah, the Houthis, and from Iraqi militias under Iranian control and not under the control of the Iraqi government which is what we want, I think the Europeans understand and they share our concerns.

HADLEY GAMBLE: Apparently your meetings in Baghdad led to more meetings all through the night and a great deal of worry there that anything that might happen to U.S. troops or U.S. military installations could have a major backlash for the Iraqis and their government. What's your take there?

SECRETARY OF STATE MIKE POMPEO: So that's not our intention. Our intention is to help the Iraqis with the needs that they have. ISIS still remains in Iraq. We have forces on the ground they're working to help the Iraqi security forces stand up and rebuild themselves so that we can continue to keep ISIS risk at bay. They understand that we're there for that purpose and we don't want Iraq in the middle of this. This is what we went to tell them. They needed to make sure that Americans were safe at the facilities that they have invited us to be in. And second, they needed to understand that if there were actions taken against American forces in Iraq that we would respond forcefully and appropriately against Iran, that that response likely would not take place in Iraq but would likely take place in Iran itself.

HADLEY GAMBLE: Of course you've mentioned that the Trump administration, President Trump has said, again and again, he doesn't want a conflict directly with Iran...

SECRETARY OF STATE MIKE POMPEO: ...None of us do....

HADLEY GAMBLE: But you've set up a situation whereby you could respond as you say militarily if you needed to. But this of course is a president that campaigned on the idea that we need to end these foreign engagements. We need to bring the troops back from Afghanistan, Iraq and Syria. How worried are you that we could escalate this situation?

SECRETARY OF STATE MIKE POMPEO: This is a president who made clear that we would protect America's interests. He campaigned on America first. If a nation strikes an American interests, President Trump's been unambiguous. You saw the strong action he took when Assad used chemical weapons right. We drew a red line and when we made the commitment, President Trump executed that. In the same way an attack on American interests from an Iranian led force - whether it's an Iranian proper or it's an entity that is controlled by the Iranians - we will hold the responsible party accountable. President Trump's been very clear about that. Our response will be appropriate.

HADLEY GAMBLE: Obviously investors and governments have been keenly watching what all of this has done in terms of movements in the oil markets movements in the energy markets generally. How do you respond to the idea that the United States has realized what other governments in the past, particularly Saudi Arabia have, which is that oil can be used as a weapon?

SECRETARY OF STATE MIKE POMPEO: Simple math. That's how I respond. About a year ago President Trump withdrew from the JCPOA - you'll recall I bet on your television station - folks, we're talking about how oil prices would rise they'd spike it would be chaos in the crude oil markets. In fact, crude oil prices today are lower than they were the day that we withdrew from the JCPOA. Lower, not higher not radically higher, not crazy higher, not chaos, but lower. We've done the good diplomatic work to ensure that our oil markets are adequately supplied. We've worked with our partners. American economic excellence and freedom, deregulation has created enormous capacity for crude oil production in the United States itself. And that combination of good work around the world and work inside the United States has continued to make sure that crude oil markets are adequately adequately supplied and I'm convinced they will continue to be.

HADLEY GAMBLE: And when it turns to higher oil prices obviously higher oil prices good news, for countries like Saudi Arabia and other GCC nations --

SECRETARY OF STATE MIKE POMPEO: Yeah but they're not higher --

HADLEY GAMBLE: My question would be in terms --

SECRETARY OF STATE MIKE POMPEO: I mean it's just math. It's just math. You can chart it yourself. Put the chart up on your screen. The prices are lower today than when we withdrew from the JCPOA.

HADLEY GAMBLE: Well taking Iran off the table in terms of its supplies to the markets, that actually benefits Russia

SECRETARY OF STATE MIKE POMPEO: Oil prices are lower today than when we took the first barrel of oil off the market from Iran. They were producing roughly two point seven dollars billion barrels per day for export and down to now somewhere around a million barrels per day. We're heading them towards zero. And crude oil markets, even the futures markets - show them on your screen - they continue to predict that there will be adequate supply in the crude oil markets.

HADLEY GAMBLE: When you talk about Saudi Arabia specifically as a U.S. ally. When I spoke to the Deputy U.S. Secretary of Energy several months ago at the Munich Security Conference, we had a long conversation about the nuclear file with regards to Saudi Arabia because of course we've heard from Mohammed bin Salman over the last couple of years, he said if Iran were to get a bomb, we would want to get a bomb as well. And he assured me that were Saudi Arabia to start working with U.S. companies that there would be a red line drawn, that they would have to subscribe to this 123 agreement that they would not be given a green light to enrich uranium on their own. Where are we today on this? Because there has of course been a great deal of controversy over the potential for US material and technology to make its way to Saudi Arabia.

SECRETARY OF STATE MIKE POMPEO: So the United States' position is very clear we don't want any country - Saudi Arabia or Iran - to have nuclear weapons systems. We're working to prevent that in both places. I only wish that John Kerry had done that with Iran. I only wish he had gotten this a deal which would have prevented them to having a clear pathway to a nuclear weapon system. I regret and that's what we're having to deal with today. As for Saudi Arabia we've been negotiations with them for some time. If they are able to get their civil nuclear program right, we're able to get the security assurances we need, I assure you there'll be better security assurances than John Kerry got from Iran. But I have to say, when you talk to the Saudis they say we want the deal Iran got. This is difficult. And so we're going to get them to the right place and if we do, if we're successful that will be good outcomes for American businesses as well. This will help grow the American economy too.

HADLEY GAMBLE: You have no worries that we could end up with a potential arms race in the Middle East.

SECRETARY OF STATE MIKE POMPEO: There's always concern. That's why I wish John Kerry got a real deal. The threat of Iran having a nuclear weapon is precisely what is driving Saudi Arabia to be so concerned about where it sits today.

HADLEY GAMBLE: Shouldn't we be trying to prevent that at all costs?

SECRETARY OF STATE MIKE POMPEO: We're trying to prevent it Iran. That's exactly what we're working on.

HADLEY GAMBLE: Walk me through the difficulties made for you in your position when you have your predecessor John Kerry having high level conversations with counterparts or former counterparts in Tehran. Does this make your job difficult?

SECRETARY OF STATE MIKE POMPEO: It's inappropriate. It's not consistent with what former Secretaries of State ought to be doing, and I'll leave it at that. Suffice it to say, previous secretaries of state ought to just get off the stage when their day is done. They ought to leave foreign policy to their successors.

HADLEY GAMBLE: And he shouldn't be prosecuted potentially under the Logan Act?

SECRETARY OF STATE MIKE POMPEO: Heard what the president has said. I'll leave to the Department of Justice to make decisions about prosecutions. I know only this. If you're out talking to someone that you did a deal, with before and you're urging the country to behave in a way that is inconsistent with American policy. That's not right.

HADLEY GAMBLE: Walk me through this. So you, in a speech a couple of days ago, described China as a new kind of challenge. Where I sit in the Middle East, I have seen not only the growing Russian influence in countries like Saudi Arabia and the UAE but also the rise of China. They are now the largest foreign direct investor for the UAE for example. And speaking to the ambassador a few days ago he essentially told me we can't not work with China. We can't not get engaged with Asia more broadly. How worried are you about these new relationships as they continue to evolve. Does that leave the U.S. out?

SECRETARY OF STATE MIKE POMPEO: Hardly. We've talked about China a great deal. These countries understand I think each of these countries the Middle East understands their true partner their true ally is the United States of America. I think they'll continue to do that. Look the United States has a great deal of trade with China and we benefit from that. President understands that too. He wants to get those trade deals right. He wants to make them very reciprocal, even. He wants, he wants our businesses to be able to compete in China in the same way that Chinese businesses can compete in the United States. Those are simple asks. As for the Middle East and frankly all around the world we welcome China's participation as an economic actor. What we don't welcome is China showing up and bribing people. China showing up and lending money at rates that clearly have some implication that goes well beyond any private sector entity. These are debt traps. This isn't an effort to make a loan and foreclose on that loan in a way that will give China national security power or political power. And our mission our diplomatic mission is to ensure each of those countries understands the risks associated with that so that they can make good decisions for their country.

HADLEY GAMBLE: When I spoke to ambassador -- Yousef Otaiba -- and he told me that the growing relationship that they have with China particularly is starting to make people in Washington nervous. Is that something that you're concerned about?

SECRETARY OF STATE MIKE POMPEO: Our partners and allies understand clearly what America's expectations are from-- how we will handle national security matters. The things that matter to keep Emirates safe, Saudis safe, Kuwaitis safe, Bahrainis safe and Americans safe. I will continue to work with our partners in the region. I'm confident that our alliance will remain strong and that we can trade with lots of different countries and still handle the national security implications that come alongside them.

HADLEY GAMBLE: And when we also talk about trading partners in that region, I mentioned Russia. You're headed to Russia very shortly. What do you hope to achieve from those meetings?

SECRETARY OF STATE MIKE POMPEO: President Trump's asked me to go to Russia-- to talk about a broad range of issues. We have lots of places where-- I hope we can find overlapping interests with Russia. And it may be the case that we can't, where we can't we'll go our own ways. But it's important. I -- I remember as C.I.A. director I worked closely with the Russian on counterterror. I'm convinced that those efforts were important and that they saved American lives and Russian lives. There are places that we'll have a value set that is radically different. That we'll have different views. In those places we're gonna protect America's interests. But in those places where we can find common ground or an overlapping interest, it's completely appropriate, and, indeed, my duty and a necessity, that we work together.

HADLEY GAMBLE: And we've seen the United States getting very tough on countries like Iran. We've seen them getting tough on North Korea, as well as on China in these trade negotiations. But at the same time, a lotta folks say, you know, "When are we really gonna get tough on Russia?" How much of the Mueller report is gonna come in to the conversations that you have in the coming days?

SECRETARY OF STATE MIKE POMPEO: Boy, that's crazy talk. (LAUGH) That's absolutely crazy talk. And I've heard it-- I've heard it from the previous administration. They said, "Oh, we're not tough on Russia." I only wish they would have stopped the election interference. I only wish they would have put global Magnitsky on some of the bad actors in Russia in the way this administration. I only wish they hadn't gutted the defense budget to the great benefit of Vladimir Putin. Right? We've put real money into our Defense Department. Vladimir Putin can't possibly think that's a good thing for him. They gutted the defense budget. The actions that this administration take I would put up against any in terms of our seriousness in pushing back on Russia and raising costs for them. We can do that, but at the same time we can have conversations with them and see if there are places that we can find to work together.

HADLEY GAMBLE: Are you gonna be able to put an end to that meddling when it comes to our next elections?

SECRETARY OF STATE MIKE POMPEO: Well, it's a longstanding challenge for America. There's-- (CHUCKLE) I've seen reporting that suggests that somehow 2016 was the first time Russia had attempted to interfere in a Western democracy anywhere in the world. Those of us in the national security world know that's simply not true. This has-- been a longstanding challenge where the Soviet Union and then Russia had tried to-- impact Western democracies. Not just ours, but others as well. We'll certainly talk about that. We did pretty good work 2018. Our team at D.H.S. and F.B.I. and all across the United States government felt very good about the security of the elections in 2018 following the 2016 elections. We hope to make it even better in 2020. I'm confident that the American people should feel good about the security of our elections in 2020.

HADLEY GAMBLE: As you say, there are a lot of areas where the United States could work-- quite well with Russia. Whether it regards energy in Europe or the potential for movement in the Syria situation as well. Where are we today with Venezuela?

SECRETARY OF STATE MIKE POMPEO: Syria's a good example. I would add I hope we can find a place we can work together in Afghanistan also. Russia faces a terror threat from Afghanistan also. I do think there are places. In Venezuela we'll have a good conversation. I had one with Foreign Minister Lavrov when I was in Finland last week. We'll have another one when I see Foreign Minister Lavrov in Sochi. And then with President Putin as well. We'll see how much progress we can make. Our mission in Venezuela is very clear. We want no foreign interference. I don't want foreign interference from China, from Iran, from Russia, from Cuba or anyone else. We want the Venezuela people to have their country back and have their own democracy.

SECRETARY OF STATE MIKE POMPEO: But more broadly and more appropriately, we just want them to have a chance. That they have elected Juan Gaido as their interim president, through their constitution. That's appropriate (UNINTEL), and our task is to ensure that they get the benefits of that so that you know the destruction that's been had upon that economy, and it happened long before American sanctions.This is years and years of decay in their systems. And now you have starving children. Children that are sick without medicine. That's not right, and any country that's interfering and preventing them from getting that ought to pack up, leave. Allow the Venezuela people to begin to regrow their economy and rebuild their nation.

HADLEY GAMBLE: And so many people would say, though, that that's what the sanctions on Iran were really doing to the Iranian people, particularly with the economy tanking as badly as it has.

SECRETARY OF STATE MIKE POMPEO: These sanctions are directed at the Iranian leadership to change their behavior. Point blank.

HADLEY GAMBLE: But it does make the people suffer.

SECRETARY OF STATE MIKE POMPEO: Point -- point blank.

HADLEY GAMBLE: But the people do suffer as a direct result of that.

SECRETARY OF STATE MIKE POMPEO: The Iranian leadership understands the cost that's being imposed. And this is a kleptocratic regime that has stolen billions of dollars. It wastes the Iranian people's own money on these proxy wars all across the world. The Iranian government, while its people are suffering, according to them, is spending money in Venezuela. (LAUGH) They're sending forces to Venezuela. This is not a leadership that reflects what the Iranian people want, and we are determined to assist the Venezuela people in getting a leadership regime that leads in the way they want it to.

HADLEY GAMBLE: And finally, sir, I have to ask you about how you would characterize the Trump doctrine? What we've seen with regards to China. The trade war. We've seen with regards to Iran in terms of these sanctions. And, you know, what's been interesting to international investors in particular, and is very much focused on energy markets, the tightening in the Straight of Hormuz, is the fact that with all of the pressure and all of the military hardware headed that way at this moment-- the president coming out just a couple days ago and essentially saying, you know, "I'd welcome a phone call from Tehran. Just call me." How do you describe the Trump doctrine?

SECRETARY OF STATE MIKE POMPEO: Of course we'd welcome that call. Of course we want a peaceful, diplomatic resolution to each of these conflicts that we've talked about here today. That makes perfect sense. It's entirely consistent. What President Trump has done is we've spoken the truth. Right? Previous administrations just ignored China. We've called them out. They ignored the fact that intellectual property was being stolen. We've tried to push back against it, and we will. And they've had forced technology transfer in China. They have a million Uighurs being detained. Previous administration turned a blind eye. We won't. Previous administrations saw that NATO countries weren't paying their fair share. This administration has called it out. Previous administrations allowed the Human Rights Commission at the United Nations to be occupied by some of the most grotesque human rights abusers in the world. Previous administrations wouldn't call it out. We're realistic. We understand the world as it is, and we're working to make it better in every one of those forums.

HADLEY GAMBLE: Realpolitik?

SECRETARY OF STATE MIKE POMPEO: Callin' it like we see it, accepting facts as they are, not papering over them, and working every day to improve America's position in the world.

HADLEY GAMBLE: Mr. Secretary, thank you so much for joining CNBC

SECRETARY OF STATE MIKE POMPEO: Thank you very much, ma'am.

END

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